“Magellan plans on increasing its payout by 20 percent this year and raising it another 15 percent next year,” Cramer said. “Magellan has a long history of raising its distribution, something they’ve done for the last 48 consecutive quarters.”
Even if oil prices decline, MLPs still have negotiating power as the supply and demand fundamentals remain in the industry’s favor.
“We have a serious shortage of pipeline capacity in this country,” Cramer said.
There are also plenty of other MLP and oil infrastructure-related ETF options on the market. The First Trust North American Energy Infrastructure Fund (NYSEArca: EMLP) has a 3.0% yield. The Yorkville High Income MLP ETF (NYSEArca: YMLP) shows a 8.6% yield. The Global X MLP & Energy Infrastructure ETF (NYSEArca: MLPX) has a 2.32% 30-day SEC yield. [A Rapid Ascent for This MLP ETF]
For more information on master limited partnerships, visit our MLPs category.
Max Chen contributed to this article.